Joseph Yun, acting assistant secretary of state for East Asian and Pacific affairs, says U.S. and Chinese officials will huddle soon to begin setting up a bilateral working group focused on cyber attacks and crimes American officials claim are carried out in China, sometimes by the government.

The idea for the bilateral cyber group came after Secretary of State John Kerry, during a recent Asian swing, had a “very, very lengthy” and direct conversation with multiple Chinese officials about cyber shenanigans Washington believes originated in their nation, Yun said. In a candid moment rare for senior diplomats, Yun said, referring to the Chinese government, that U.S. officials believe “the state” has been involved in “cyber theft.”

Senate Foreign Relations East Asian and Pacific Affairs subcommittee Chairman Ben Cardin, D-Md., warned Yun the U.S. members of the group must not cede America’s right to respond with “aggressive actions” to cyber attacks.

Cardin said all members of the subcommittee want a “productive” U.S.-China relationship, but added “serious issues” must be resolved before that can be accomplished.

Sen. Marco Rubio, R-Fla., the subcommittee’s ranking member, warned that America’s allies in the region are questioning Washington’s willingness to step up its military, economic and diplomatic presence and efforts there.

Yun told the senators the Obama administration has scheduled “a series of engagements” with their Chinese counterparts ahead of a major conference in July during which Asian leaders will hold high-level talks.

One issue that will be discussed during those “engagements” is North Korea’s recent bellicose threats of nuclear war with the United States and South Korea. Yun assured the senators that Chinese leaders are in lock step with Washington in wanting to cool the North’s hawkish talk and actions.

David Helvey, U.S. deputy assistant secretary of defense for East Asia, told the possible 2016 GOP presidential candidate that Pentagon officials are monitoring the build up “closely.” Specifically, defense officials are concerned about Beijing’s work on nuclear-powered submarines, long-range missiles and cruise missiles, as well as other platforms, he said.

Helvey said the Pentagon concludes that such tools, and others, show China is building a military to carry out an “anti-access and aerial denial” strategy tailored to “to limit the ability of the United States ... to operate in the western Pacific.”